FTZ’ine April 2024
April 3, 2024
Crazy Ivan
Washington politics are craziest during a Presidential election year. But some of the strange moves this year make it hard for even an insider to follow. Consider these sharp course corrections in just the last month:
Left Rudder
Speaker of the House Mike Johnson, Republican of Louisiana, was threatened with loss of the gavel by members of his party after he moved a bill containing aid for Ukraine without funds for border enforcement, a conservative hot-button issue. His job as Speaker is secure for now though, after Democrats vowed to protect him in any ouster attempt by conservatives.
The Biden administration is considering relaxing federal restrictions on marijuana access. The move is of interest to FTZs that sometimes find themselves stuck between the different handling of marijuana in states where it is legal.
Right Rudder
The aid package for Israel and Ukraine, which the President has signed, also includes a 12 month deadline for Tik Tok’s U.S. operations to be sold or banned.
President Biden also announced that he will push for higher tariffs on Chinese steel and aluminum, tough talk on China that mirrors policies adopted by his Republican opponent.
Top Story: Cargo Owners On Hook For Francis Scott Key Costs
Grace Ocean Private Ltd, the owner of the container ship M/S Dali, have declared General Average in the wake of the Francis Scott Key Bridge collapse. That could bring exceptional expenses to shippers with containers on the ship, which is still stuck under the debris of the bridge it struck in late March.
Mediterranean Shipping Company (MSC) reported that although the vessel’s salvage operations are still ongoing, Maersk Line, the charterer of Dali, informed them about the vessel owner's decision to declare a General Average and require all cargo owners to contribute to as-yet-undetermined salvage costs.
Richards Hogg Lindley (RHL) of London has been appointed as Maersk’s General Adjuster, and they have informed MSC that they intend to keep all containers under wraps until security arrangements have been made to cover the additional expenses.
An MSC official stated: “MSC very much regrets any inconvenience arising from this incident and will do the utmost to assist its customers to ensure the matter is handled as efficiently and smoothly as possible.
There are some principles of maritime law, like the concept of General Average, that have no equivalent under normal contract law or land or air carriage.
In General Average and Salvage situations such as this, the carrier has a right to place a lien on the cargo. If the cargo is insured under the usual ICC clauses, both the bond and the final amount of general average and salvage is covered under the insurance policy. Others who forgo the cost of insurance will be forced to cover the costs of the General Average declaration directly.
Tech Tip: CBP Crackdown On de minimus Fraud May Ensnare Ocean Shippers
Last month Customs and Border Protection (CBP) implemented cargo messages in ACE to communicate with the entry filer on shipments that do not have a precise, or specific, description of the merchandise to assist with CBP targeting of fraudulent entry filings.
CBP is aiming to eliminate descriptions such as “gift”, “daily necessities”, “accessories”, “parts” and “consolidated”. “Consolidated” is only acceptable at the master bill level. Carriers and other parties electing to file electronic cargo information data to CBP are required to provide a precise description of the cargo.
Right now, warning messages will be sent via ACE Cargo Release after release of the cargo. Brokers and importers are expected to correct the issue on future shipments.
Questions related to the new description requirements from CBP? Contact us at info@iscm.co.
Commercial Operations Resume (Slowly) at Port of Baltimore
The Port of Baltimore opened a deeper channel for commercial ships to get in and out for a few days, a significant step toward reopening the major maritime shipping hub that has remained closed to most traffic since the Francis Scott Key Bridge collapsed last month.
The new channel will be 35 feet (12 meters) deep, which is a substantial increase over the three other temporary channels established in recent weeks. It puts the cleanup effort slightly ahead of schedule, as officials previously said they hoped to open a channel of that depth by the end of April.
Five of the seven cargo ships that were stuck in Baltimore’s harbor have passed through the new channel, including one loaded car carrier. The expanding operations will help take a lot of the trucks off the road that are needed at the moment to handle the freight and vehicle re-routes.
The Balsa 94, a cargo ship, sailed through the temporary channel with the help of two tugboats, passing chunks of the fallen steel bridge and the still grounded Dali freighter.
At nearly 350 feet long, it was the smallest of the stranded vessels, and is reported to be headed to Saint John, Canada, where it’s scheduled to arrive by early next week.
It was followed by the Saimaagracht, a Netherlands-flagged general cargo ship, then by the Wallenius Wilhelmsen vehicle carrier Carmen sailing under the flag of Sweden. The Phatra Naree, a Thailand-flagged bulk goods carrier, went through the temporary channel two hours later.
About half the vessels that currently call in Baltimore’s port can use the new deep-draft channel, said Richard Scher, a spokesman for the Maryland Port Administration. The Coast Guard has the final say, however, and considers criteria such as weight and beam limits.
Coast Guard officials said the latest channel had a depth of 38 feet, though vessels refer to the 35-foot draft depth. It is the deepest yet of four temporary, alternate routes in and out of the port.
After shutting down next week, the 38-foot channel will not reopen until around May 10, to allow salvage crews to begin lifting steel off the Dali and using a hydraulic grabber to clear debris from the harbor’s main shipping channel. The Army Corps of Engineers expects to reopen the Port of Baltimore’s permanent 700-foot wide, 50-foot deep channel by the end of May.
Tik Tok Ban Highlights Declining China Relations
Now that President Biden has signed off on legislation mandating the sale of TikTok by its parent company, ByteDance, international traders are wondering if a response from China might further degrade relations between the two countries.
This mandated divestiture is poised to be one of the most significant and contentious technology transactions in recent years.
The President also announced that he has asked the United States Trade Representative (USTR) Katherine Tai to research higher tariffs on Chinese steel and aluminum.
The current tariff rate for both steel and aluminum could climb to 25% under Biden’s proposal. The president said separate tariffs of 10% on aluminum and 25% on steel would also remain in place.
Both moves signal a strident relationship with China that continues to pressure trade.
Analysts estimate that the U.S. operations of TikTok could command a price in the tens of billions of dollars, making it an acquisition target for only the most financially robust entities. However, it is not clear the financial capacity to acquire such a valuable asset is just the tip of the iceberg.
During a visit to the Pittsburgh headquarters of United Steelworkers, President Biden announced that he will push for higher tariffs on Chinese steel and aluminum. He called the U.S. Trade Representative to triple the China tariff rate on steel and aluminum imports.
The current tariff rate is 7.5% for both steel and aluminum but could climb to 25% under Biden’s proposal. The president said he was asking his trade representative to seek the increase, and separate tariffs of 10% on aluminum and 25% on steel would also remain in place.
“Prices are unfairly low because China’s steel companies don’t need to worry about making a profit because the Chinese government subsidizes them so heavily,” Biden said at the United Steelworkers headquarters in Pittsburgh. “They’re not competing, they’re cheating.”
Blumenauer Pushes Marijuana Legalization As He Prepares To Retire
The Associated Press reported at the end of April that the U.S. Drug Enforcement Administration (DEA) will reclassify marijuana as a less dangerous drug, a historic and surprising shift by the nation’s top drug enforcement agency.
That move, which still must be reviewed by the Office of Management and Budget, would recognize the medical uses of cannabis and acknowledge it has less potential for abuse than drugs such as heroin and fentanyl. It would not legalize marijuana outright for recreational use, but the move was lauded by retiring Congressman Earl Blumenauer as a step in that direction.
The long-serving congressman from Portland, who has become the top marijuana advocate on Capitol Hill, believes the issue could boost President Biden’s support with young voters. It could also help FTZs in the 38 states where marijuana use is permitted locally but the federal ban is still enforced.
As a State Representative more than 50 years ago, Congressman Blumenauer cosponsored the first bill in the country to decriminalize small amounts of marijuana.
The move would be the DEA’s biggest policy change in decades. If approved, the new policy would move marijuana from a Schedule I substance to a Schedule III substance. After years of chiding the Biden administration to act on marijuana legalization, Congressman Blumenauer praised the move saying “We will be one step closer to ending the failed war on drugs. Marijuana was scheduled more than 50 years ago based on stigma, not science.”
Congress could not legalize possession or use of while marijuana remains on any drug Schedule.
FTZ Staff Activity
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-53-2024) in FTZ 281 on behalf of El Paso Communications Systems, Inc., Doral, FL on March 22, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-54-2024) in FTZ 29W on behalf of Castlen Terminals, LLC, Owensboro, KY on March 27, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-55-2024) in FTZ 29 on behalf of Owensboro Riverport Authority, Owensboro, KY on March 28, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-56-2024) in FTZ 126D on behalf of Tesla, Inc., McCarran/Sparks, NV on March 29, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-57-2024) in FTZ 177 on behalf of Castlen Terminals Inc., Mount Vernon, IN, on April 2, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-58-2024) in FTZ 29X on behalf of Owensboro-Daviess County Regional Airport Board, Owensboro, KY on April 1, 2024
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-59-2024) in FTZ 32 on behalf of Dux Forwarding Corporation, Doral, FL on April 2, 2024
- FTZ Board Staff processed a Tradition Site Framework Subzone Application (S-60-2024) in FTZ 7 on behalf of Hardware Plus, Inc., Caguas, PR on April 2, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-61-2024) in FTZ 202 on behalf of Brinks Global Services USA, Inc., Los Angeles, CA on April 4, 2024
- FTZ Board Staff processed a Termination (S-62-2024) in FTZ 32 on behalf of BHA Jewelry, LLC, Miami, FL on April 4, 2024
- FTZ Board Staff processed a Termination (S-63-2024) in FTZ 147 on behalf of Boohooplc.com, Inc., Elizabethtown, PA on April 5, 2024
- FTZ Board Staff processed a Tradition Site Framework Subzone Expansion Application (S-64-2024) in FTZ 40I on behalf of Swagelok Company, Wickliffe, OH on April 5, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-65-2024) in FTZ 32F on behalf of Taylor Sudden Service, Inc., Hialeah, FL on April 10, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-66-2024) in FTZ 32G on behalf of Interglobo North America, Miami, FL on April 10, 2024
- FTZ Board Staff processed a Tradition Site Framework Subzone Application (S-67-2024) in FTZ 262 on behalf of Hamilton Beach Brands, Inc., Byhalia, MS on April 10, 2024
- FTZ Board Staff processed a Tradition Site Framework Subzone Application (S-68-2024) in FTZ 80 on behalf of Vitesco Technologies USA, LLC, Seguin, TX on April 10, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-69-2024) in FTZ 75 on behalf of AES Direct Express LLC dba SKU Distribution, Chandler, AZ on April 12, 2024
- FTZ Board Staff processed a Tradition Site Framework Subzone Application (S-70-2024) in FTZ 273 on behalf of Sediver USA, Inc., Memphis, AR on April 12, 2024
- FTZ Board Staff processed a Termination (S-71-2024) in FTZ 32C on behalf of Noamex, Inc., Hialeah & Opa Locka, FL on April 23, 2024
- FTZ Board Staff processed a Termination (S-72-2024) in FTZ 38 on behalf of Teijin Carbon Fibers, Greenwood County, SC on April 23, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-73-2024) in FTZ 295A on behalf of Challenging Warehousing, Inc., Johnstown, PA on April 24, 2024
- FTZ Board Staff processed a Minor Boundary Modification (S-74-2024) in FTZ 89 on behalf of Lithion Battery, Inc., Henderson, NV on April 24, 2024
Foreign-Trade Zone Board Activity
- Givaudian Fragrances Corporation received approval to expand Subzone 44P in Mount Olive, New Jersey. MORE
- AESC Florence LLC submitted an application to operate its Florence, South Carolina facilities as a Subzone of Foreign-Trade Zone 21. MORE
- Hardware Plus, Inc. submitted an application to operate its Caguas, Puerto Rico facilities as a Subzone of Foreign-Trade Zone 7. MORE
- PREH INC. received authorization of production activity for automotive display assemblies within Foreign-Trade Zone 94 in Laredo, Texas. MORE
- Swagelok Company submitted an application to expand Subzone 40I by adding a new site in Wickliffe, Ohio. MORE
- Twin Disc, Inc. submitted a notification of proposed production activity for power transmission products within Foreign-Trade Zone 297A in Lufkin, Texas. MORE
- Panasonic Energy Corporation of North America received authorization of production activity for lithium-ion battery cells within Foreign-Trade Zone 17F in De Soto, Kansas. MORE
- Jubilant HollisterStier, LLC submitted a notification of proposed production activity for pharmaceuticals within Foreign-Trade Zone 224 in Spokane, Washington. MORE
- Hamilton Beach Brands, Inc. submitted an application to operate its Byhalia, Mississippi facilities as a Subzone of Foreign-Trade Zone 262. MORE
- Teijin Carbon Fibers, Inc. did not receive authorization for production activity involving carbon fibers in NPF status within Foreign-Trade Zone 38 in Greenwood, South Carolina. MORE
- Vitesco Technologies USA, LLC submitted an application to operate its Seguin, Texas facilities as a Subzone of Foreign-Trade Zone 80. MORE
- Grand Design RV, LLC received authorization of production activity for motor homes within Foreign-Trade Zone 125H in Middlebury, Indiana. MORE
- World Trade Center Denver submitted an application to reorganize Foreign-Trade Zone 123 under the Alternative Site Framework with a service area ofAdams, Arapahoe, Broomfield, Denver, Douglas, Elbert, and Morgan Counties and a portion of Larimer and Weld Counties, Colorado. MORE
- Twin Disc, Inc. received authorization of production activity for power transmission products within Foreign-Trade Zone 297A in Lufkin, Texas. MORE
- Lithion Battery, Inc. received authorization of production activity for battery packs and accessories within Foreign-Trade Zone 89 in Henderson, Nevada. MORE
Crazy Ivan:
Washington politics are craziest during a Presidential election year. But some of the strange moves this year make it hard for even an insider to follow. Consider these sharp course corrections in just the last month:
Left Rudder
Speaker of the House Mike Johnson, Republican of Louisiana, was threatened with loss of the gavel by members of his party after he moved a bill containing aid for Ukraine without funds for border enforcement, a conservative hot-button issue. His job as Speaker is secure for now though, after Democrats vowed to protect him in any ouster attempt by conservatives.
The Biden administration is considering relaxing federal restrictions on marijuana access. The move is of interest to FTZs that find themselves stuck between the different handling of marijuana use at the state and federal enforcement levels.
Right Rudder
The aid package for Israel and Ukraine, which the President has signed, includes a 12 month deadline for Tik Tok’s U.S. operations to be sold or banned.
President Biden also announced that he will push for higher tariffs on Chinese steel and aluminum, tough talk on China that mirrors policies adopted by his Republican opponent.
